Question

A bill is drawn for ₹ 7,000 on 3^rd May for 3 months and is discounted on 25^th May at 5.5%. Find the present worth. 

Answer 1

Sum due (S.D.) = ₹ 7,000

Period = 3 months

Date of bill drawn = 3^rd May

Nominal due date = 3^rd August

Legal due date = 6^th August

Date of bill discounting = 25^th May 

Number of days from bill discounting date to legal due date

May	June	July	August	Total
6	30	31	6	73 days

∴ True discount (T.D.) = `("P.W." xx "n" xx "r")/100`

`= ("P.W." xx 73/365 xx 5.5)/100`

∴ T.D. = `(1.1  "P.W.")/100`        ...(i)

Also, S.D. = P.W. + T.D.

∴ `7,000 = "P.W." + (1.1  "P.W.")/100`       ...[From (i)]

∴ `7,000 = (100  "P.W" + 1.1  "P.W.")/100`

∴ 7,000 × 100 = 101.1 P.W.

∴ P.W. = `(7,00,000)/101.1`

∴ P.W. = 6923.83 ≅ ₹ 6,923

∴ Present worth of bill drawn for ₹ 7,000 is ₹ 6,923.